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Amazon's New HQ2 Makes Allies of Quarrelsome Cuomo, de Blasio

(Bloomberg) -- It took Amazon.com Inc.’s announced New York expansion to make buddies out of Governor Andrew Cuomo and Mayor Bill de Blasio.

The state’s two most powerful politicians have fought for six years over everything from mass transit to how to combat the Ebola virus. Now they’ve got each other’s back like Butch Cassidy and the Sundance Kid, rhetorical guns ablaze against an array of fellow Democrats who want to kill the deal the pair has worked for months to consummate.

A report Friday that the company may be reconsidering its plans has emboldened opponents in the state Senate and the City Council. The news came days after Senate leaders named Michael Gianaris, one of the deal’s fiercest critics, to a board that would give him power to veto it. The governor could reject Gianaris’s appointment, but he hasn’t said what he’ll do.

Powerful Democrats in Albany and New York City object to $3 billion in tax breaks and grants going to a company valued at close to $1 trillion with an owner, Jeff Bezos, who’s the world’s richest man. If the deal dies, Cuomo said, so will the political careers of those opposing it.

Stopping Amazon?

“The problem is the state Senate has adopted that position and that’s what could stop Amazon,” Cuomo told a gathering of business executives Friday who asked him about the intra-party fight. “And if they do, I would not want to be a Democratic senator coming back to my district.”

The unlikely Cuomo-de Blasio alliance will now have to fight on another front that raises the stakes in the already pitched battle. Both men spoke out Friday about what they see as the benefits to New York, while others questioned whether Amazon actually intends to withdraw and how much more political capital may be necessary to save the deal.

The governor and mayor are in no position to offer the company more, and their best hope is to rally public support with the help of construction and building services unions that have been assured jobs from the project.

“This is the type of extortion by Amazon that’s got us into this mess in the first place,” Gianaris said Friday in an interview on Bloomberg Television. “They are sitting there, dictating to governments of this country how much money they want, making them compete with each other, forcing them to sign secrecy agreements, and then threatening to leave if they don’t get their way.”

Public Backlash

Amazon expected it would face the biggest public backlash to a new headquarters in New York City, Bloomberg has reported. The company chose the location anyway, wanting the benefits of the city’s large skilled-labor pool and opportunities for spouses and partners of recruited hires to find employment in their own careers, officials have said.

For Cuomo and de Blasio, it’s a no-brainer: those tax breaks and grants in return for as much as $27.5 billion in tax revenue by 2045 and 25,000 to 40,000 jobs paying an average $150,000 a year. It holds the promise of making the city a tech-industry leader rivaling Silicon Valley and Boston’s Route 128 corridor.

Yet the political stakes in this fight may be greater than the economic benefits. Opponents say Amazon’s arrival would have much less of an impact than Cuomo and de Blasio would have the public believe. The city’s economy already employs 4.6 million people, and it produced 71,000 new jobs in 2018.

The influx of new employees would average 1,600 a year -- a much more muted impact in a city of 8.6 million than in northern Virginia, where Amazon plans to build an equivalent campus. The financial incentives sound less impressive in a state and city that have proposed combined budgets totaling more than $267 billion next year.

At the same time, the mayor’s alignment with Cuomo and Amazon carries considerable political risk. He’s been traveling the U.S. trying to establish himself as a national spokesman for progressive Democrats who are decrying the country’s income inequality.

Now he finds himself defending a company with a reputation for union-busting and accused of causing an affordable housing crisis in its hometown of Seattle. And he’s now paired with Cuomo firing rhetorical shots at Gianaris, who has been one of the mayor’s few staunch backers in the state Senate.

“There’s a lot of people who like to go to rallies, there’s a lot of people who like to offer critiques,” de Blasio said, aiming his attack at Gianaris and others who would jeopardize the deal. “But I don’t think there’s a lot of people who’d want to lose 25,000 to 40,000 jobs and then have to answer to their constituents.”

‘Yes, They Can’

The mayor also has found himself on the other side of Alexandria Ocasio-Cortez, the self-described Democratic-Socialist representative from the Bronx and Queens who has been one of the most vocal critics of Amazon. She saw the news of a potential withdrawal as a victory.

“Can everyday people come together and effectively organize against creeping overreach of one of the world’s biggest corporations? Yes, they can,” she said on Twitter.

The mayor’s warning hasn’t daunted City Council Speaker Corey Johnson, a candidate for mayor in 2021 who doesn’t see a political downside in taking on Amazon. Johnson reacted to Friday’s reports by saying it shows that the City Council he leads has been doing a good job. “No company is entitled to public land and subsidies without tough public scrutiny,” he said.

Johnson has the support of almost all the 48 Democrats on the 51-member City Council, including Jimmy Van Bramer, who represents the Long Island City, Queens neighborhood across the East River from Manhattan where Amazon wants to set up its 4 million-square-foot campus.

“Shame on you, shame on your corporation for coming to New York City” is how Van Bramer began his questioning of Brian Huseman, Amazon’s vice president for public policy, during a Jan. 30 council hearing.

Johnson told Huseman: “We have 63,000 people sleeping in a homeless shelter tonight. We have subways falling apart. We have schools that aren’t getting money they deserve. We have public housing that is crumbling around us not far from where Amazon wants to locate. Don’t you think there’s a better way for us to spend three billion dollars?”